New Employment Laws Effective July 1st

With July just around the corner, California employers should be aware of two important changes to the law:

Minimum Wage Increase

Effective July 1, 2014, the minimum wage in California will increase to $9.00 an hour, up from $8.00 an hour. Minimum wage will again increase effective January 1, 2016 to $10.00 an hour. For employees earning the minimum wage, the increase will also affect overtime and double-time rates. For an employee earning $9.00 an hour, the overtime rate will be $13.50 an hour and the double-time rate will be $18.00 an hour. Remember, non-exempt employees in California must be paid overtime for all hours worked in excess of eight hours up to and including twelve hours in any workday, and for the first eight hours worked on the seventh consecutive day of work in a workweek; they must be paid-double time for all hours worked in excess of twelve hours in a workday and for all hours worked in excess of eight on the seventh consecutive day of a workweek.

Changes to Paid Family Leave

California’s Paid Family Leave (PFL) law provides up to six weeks of wage replacement benefits for individuals who must take time off to care for a seriously ill child, spouse, parent, or registered domestic partner, or to bond with a new child. PFL is a component of the State Disability Insurance (SDI) program. PFL benefits are not paid by the employer; they are paid by the State; and employees must submit applications for PFL benefits directly to the State of California Employment Development Department.

Importantly, PFL does not require employers to give employees time off; it does not entitle employees to take time off; and it does not provide job protection while an employee is out on leave. PFL merely provides wage replacement benefits if an employee is entitled to take time off under some other statute or employer policy.

Beginning July 1, 2014, PFL will be broadened to allow employees to receive wage replacement benefits when caring for a more inclusive list of relatives – in addition to a seriously ill child, spouse, parent, or registered domestic partner, California employees will also be eligible to receive PFL wage replacement benefits when taking take time off work to care for a seriously ill parent-in-law, grandparent, grandchild, or sibling. If employers have a section outlining PFL benefits in their handbooks, that section should be updated to include these new categories of relatives.